New legislation was recently introduced in the US Senate potentially affecting USDA-FSA program payment limitations. The Farm Program Integrity Act, co-sponsored by Senator Grassley from Iowa and Senator Brown from Ohio, seeks to limit FSA payment limitations to partnerships. If passed, the new law could have significant impacts on many larger farms.
Most FSA programs include payment limitations which limit the number and amount of payments any individual and some type of business entities may receive. See the table below for programs and their respective payment limitations. The limitations mean that no person, corporation or LLC may receive more than the designated limitation for the corresponding program in a single year. However, there is a notable exception to the payment limitation rule – general partnerships. Currently, a general partnership may have as many payment limitations as it does eligible partners. The Farm Program Integrity Act would limit general partnerships to just two payment limitations.
Let’s look at some examples using the ARC program ($125,000 payment limitation):
Farmer is a sole proprietor and is enrolled in ARC. Farmer is eligible for one payment limitations may not receive more than $125,000 in ARC payments in any year.
Farmer is married and Spouse owns 50% of the farm assets. Both Farmer and Spouse are likely eligible for a payment limitation and could receive up to $250,000 in ARC payments each year.
Ohio Grain Farms LLC is a farm operation with 4 owners, all of whom are actively engaged in the farming operation. Because this entity is an LLC, it is only eligible for one payment limitation. The LLC cannot receive more than $125,000 in ARC payments in any year.
Source: osu.edu
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Categories: Ohio, Government & Policy